Dollar stabilizes before US producer price data release

There was little change in the dollar against major currencies today, Friday, with the return of concerns about the performance of the US economy, and ahead of the release of producer price index data later in the day and the meeting of the Federal Reserve to decide on interest rates next week.

According to “Reuters”, investors are awaiting a series of decisions related to interest rates by central banks next week, including the Reserve Council, the European Central Bank and the Bank of England.

Markets are betting that the three will slow the pace of interest rate hikes by 0.5 percentage point increments, at a time when policymakers continue to push to accelerate growth through monetary tightening to curb soaring inflation.

US data on producer price inflation, due at 1330 GMT, is being watched for signs of a slowdown in interest rate hikes, awaiting the release of consumer price data on Tuesday.

Thursday’s data showed weekly jobless claims rose at a moderate pace, adding to investor jitters about the outlook.

The dollar index, which measures the performance of the US currency against a basket of six major currencies, did not witness a significant change to settle at 104.780.

The index is still up about 9.5 percent this year so far, but fell by more than six percent in the fourth quarter, reflecting pessimistic expectations about inflation and interest rates.

Euro settled against the dollar at $1.05555, near the highest level in six months, which it recorded this week, heading for gains for the third week in a row.

There was also little change in the pound sterling on Friday at $1.22460, not far from the six-month high of $1.2345 that it reached on Monday when the government unveiled reforms aimed at preserving London as one of the most competitive financial centers in the world.

While the Japanese yen jumped by 0.7 percent, and rose in the latest trading by 0.3 percent to 136.280.